Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution

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Rob Chesnut provides this blog, an excerpt adapted from his latest book, Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution (St. Martin’s Press, 2020) and used with permission.  You can purchase his book here.  This blog is a companion to his podcast Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution.

The primary guidance I have for those who find themselves having to work out appropriate consequences is: put on your ethics goggles and be intentional. At every stage of this process, every leader involved should strive for fairness and honesty and be able to understand how decisions come across not just to those involved but to other employees.

Let’s work through a fictional example that will ground some of these ideas. Milo has spent the last year working as a logistics manager for a family-owned furniture company with 150 employees. The company has a code of ethics that includes a $100 limit on gifts. Milo’s administrative assistant, who is the nephew of the owner, mentioned to his uncle that Milo accepted a pair of Stanley Cup playoff tickets worth $500 from a shipping partner.

Clearly, Milo broke a rule.

The owner calls Milo’s manager and learns that Milo is an excellent employee who has never had any other complaint lodged against him. Next, the owner talks to Milo, who says he realizes that he was supposed to read the ethics statement but he never got around to it. He relates that at his last company, there was no policy about gift limits, so he did not think to check when the tickets arrived. He apologizes and appears genuinely upset to learn that he violated this rule. Not only was Milo contrite, he offered to call the vendor who gave him the tickets and reimburse the value.

Milo screwed up here, no question. He was careless . . . but, far as I can tell, not devious. Based on these facts, I’d probably advise the owner to give Milo a stern verbal warning. I’d be sure to say if he did this again, there would be serious consequences. I’d reinforce that he must read the code of ethics. I would remind Milo that he should not retaliate in any way against his admin, who had every right and arguably a duty to report his violation. If he’s already used the tickets, Milo probably should reimburse the shipper and explain that he made a mistake, in part so that the furniture company is not seen as a partner where high-value gifts are expected or appropriate.

This may seem lenient. The company has every right to “throw the book” at Milo . . . but he seems like a very good employee who made a mistake. Demonstrating compassion and thoughtfulness in this case might create an opportunity for the owner to remind everyone to reread the code of ethics, and thus prevent more problems. There is no mandated confidentiality involved in a verbal warning, and so Milo and his admin can talk about what happened, and others who might have questions can raise them as well.

So, let’s call that scenario one. Now, let’s alter the facts a bit.

What if Milo gets angry and defensive when asked about the tickets? What if Milo’s admin says that this is the third or fourth time the shipper has sent Milo tickets for a sporting event or a concert and that he has warned him several times that accepting the tickets is a violation of company policy? What if Milo’s manager says that Milo suggested the company shift more business to this shipper . . . just a few days after the shipper sent him the tickets?

In the second scenario, the results of the investigation suggest that Milo has engineered a relationship with the shipping partner that is a conflict of interest. So here we have two identical offense reports, but the details elevate the second scenario to a much more serious level. They may suggest a deliberate bribe by an employee of the shipper, and they may be significant enough to warrant terminating Milo immediately.

Wow, harsh. Terminating an employee can be catastrophic for that individual, and it can hobble a work team. It should never be done lightly, but some offenses, like sexual harassment or fraud or bribery, are so serious that once you have established that they occurred, you must act decisively and signal that this is unacceptable behavior.

As Milo’s example shows, the facts and details always matter. Intentions are important. Mistakes are different from premeditated acts. Investigations must be fair and full, approached objectively.

In the corporate world, disciplining an employee for a code violation is a necessary part of the integrity process. And I’ll be honest: it’s my least favorite part. While it’s fun and energizing to write a code of ethics and feel like you are shaping a great company where everyone will be proud to work, it can be infuriating, frustrating, and sad when someone violates that code. Sometimes people, for a wide variety of reasons, can make consequential mistakes that cost them their jobs, put their families’ financial stability in jeopardy, and create a permanent stain on their reputations—and the company’s as well. But you have to respond, or your code will have no credibility. You’ll fail as a leader, and the people who follow the rules will suffer.

Adapted from Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution by Rob Chesnut (St. Martin’s Press, 2020).

About the Author

Rob Chesnut is the Chief Ethics Officer at Airbnb, a role he took on in late 2019 after nearly four years as the company’s General Counsel. He previously led eBay’s North America legal team, where he founded the Internet’s first ecommerce person to person platform Trust and Safety team. He was the general counsel at Chegg, Inc. for nearly 6 years, and he served 14 years with the U.S. Justice Department.

Will Technology’s Next Big Innovation Be Your Company’s Downfall?

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This blog is provided by Terry Jones, founder of Travelocity.com and founding chairman of Kayak.com. It is a companion to his podcast. Can Your Business Survive the Rapid Advance of Technology?

It’s a scenario that gets played repeatedly in the corporate world.

One moment a company is riding high, the next it’s struggling to exist, its business model disrupted by new technology and a failure to keep up with an ever-changing competitive landscape.

Take as just one example Nokia, which at one time ruled the roost in the mobile-phone market, able to boast in the late 1990s that it was the world’s largest cellphone maker.

But when Apple introduced its iPhone in 2007, Nokia proved too slow to adapt as the market, the technology and the competition began to evolve all around it. Over the next several years, Nokia became an also-ran in an industry it previously dominated.

History is replete with similar stories, and you can expect more in the future as technology continues to advance at a head-spinning rate, says Terry Jones, founder of Travelocity.com, co-founder of Kayak.com, and author of the new book Disruption OFF: The Technological Disruption Coming for Your Company and What to Do About It (www.tbjones.com).

“Our constantly changing world is disrupting what many businesses do, whether it’s photography, the book industry, the music industry or many others,” Jones says. “In the business world, change is inevitable, but success is optional.”

“Technological change can come quickly. For example, 90% of hearing aids are now produced by 3D printing and that change happened in just four years. Companies that didn’t make the change are no longer with us.”

That doesn’t mean any particular company is necessarily doomed, though.

“There are a surprising number of 100-year-old companies out there,” he says. “Most of the ones I’ve talked to have mastered the ability to shed their old skin and renew themselves when required.”

Jones says a few ways businesses can avoid becoming a disruption casualty include:

  • Be willing to take risks. “Your company was probably founded on risk, but you don’t take risks anymore,” Jones says. “But you have to take risks to move forward.” He says he speaks with many corporations that are envious of the speed with which Silicon Valley startups make decisions. “These nimble companies are constantly trying, failing, changing and moving on,” Jones says. “Disruption is in their DNA. Most larger corporations are not like that. They generally are deliberative, risk averse and ponderously slow. They focus on delivery more than discovery. That approach might have worked in a time of limited disruption, but not today.”
  • Create a culture open to new ideas. “Many businesses are stuck in corporate pinball,” Jones says. By that he means this: Each time someone dreams up a new idea, that idea gets bounced from department to department, as if its hitting the bumpers of a giant pinball machine. Each department finds a reason to say “no” to the idea, which eventually ends up in the gutter. “You have to stop closing the door and saying, ‘No,’ ” Jones says. “Your job is to get the idea to the finish line. To get it over, to say, ‘Yes.’ ”
  • Become a disrupter yourself. In this world of disruption, it’s unlikely your largest competitor will be your undoing, Jones says. The problem is those 5,000 to 6,000 new startups per year that are attacking the traditional world. “You need to put their ideas to work and become a disruptor yourself,” he says. “Disruption and innovation really are two sides of the same coin. You just call it a disruption because you didn’t do it.”

“A company may currently be strong and it may be run by intelligent executives, but the question is whether it’s adaptable enough to change,” Jones says. “Even more important, is the company proactively preparing for change? If so, it’s more likely to survive and maybe even thrive.”

About the Author

Terry Jones (www.tbjones.com), founder of Travelocity.com and founding chairman of Kayak.com, is author of the new book Disruption OFF: The Technological Disruption Coming for Your Company and What to Do About It. For the last 15 years he’s been speaking and consulting with companies on innovation and disruption. Jones began his career as a travel agent, jumped to two startups and then spent 20 years at American Airlines, serving in a variety of management positions including Chief Information Officer. While at American he led the team that created Travelocity.com, served as CEO for six years, and took the company public. After Travelocity he served as Chairman of Kayak for seven years until it was sold to Priceline for $1.8 billion.

Rebalancing Society Across the Public, Private, Plural Sectors

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Dr. Henry Mintzberg provides this blog. It is The Basic Point section from Dr. Mintzberg’s book, Rebalancing Society, Radical Renewal Beyond Left, Right, and Center ©2015, and used with permission. In his book, Henry shares seven observations. If you want to learn more about each of his points, you can purchase his book here. Dr. Mintzberg is the author of 20 books, including Simply Managing and Bedtime Stories for Managers, which have earned him 20 honorary degrees. This blog is a companion to his podcast Rebalancing Society: Radical Renewal, Beyond, Left, Center, Right.

Enough!

Enough of the imbalance that is destroying our democracies, our planet, and ourselves. Enough of the pendulum politics of left and right, as well as the paralysis in the political center. Enough of the visible claw of lobbying in place of the invisible hand of competing. Enough of the economic globalization that undermines sovereign states and local communities. Have we not had enough exploiting of the world’s resources, including ourselves as “human resources”? Many more people are concerned about these problems than have taken to the streets. The will of people is there; an appreciation of what is happening, and how to deal with it, is not. We are inundated with conflicting explanations and contradictory solutions. The world we live in needs a form of radical renewal unprecedented in the human experience. This book presents an integrative framework to suggest a comprehensive way forward.

The Triumph of Imbalance

When the communist regimes of Eastern Europe began to collapse in 1989, pundits in the West had a ready explanation: capitalism had triumphed. They were dead wrong, and the consequences are now proving fateful.

It was balance that triumphed in 1989. While those communist regimes were severely out of balance, with so much power concentrated in their public sectors, the successful countries of the West maintained sufficient balance across their public, private, and what can be called plural sectors. But a failure to understand this point has been throwing many countries out of balance ever since, in favor of their private sectors.

Welcome to the Plural Sector

There are three consequential sectors in society, not two. The one least understood is known by a variety of inadequate labels, including the “not-for-profit sector,” the “third sector,” and “civil society.” Calling it “plural” can help it take its place alongside the ones called public and private, while indicating that it is made up of a wide variety of human associations. Consider all those associations that are neither public nor private—owned neither by the state nor by private investors—such as foundations, places of worship, unions, cooperatives, Greenpeace, the Red Cross, and many renowned universities and hospitals. Some are owned by their members; most are owned by no one. Included here, too, are social movements that arise to protest what some people find unacceptable (as we have seen recently in the Middle East) and social initiatives, usually started by small community groups, to bring about some change they feel is necessary (for example, in renewable energy). Despite the prominence of all this activity, the plural sector remains surprisingly obscure, having been ignored for so long in the great debates over left versus right. This sector cannot be found between the other two, as if on some straight line. It is a different place, as different from the private and public sectors as these two are from each other. So picture instead a balanced society as sitting on a stool with three sturdy legs: a public sector of respected governments, to provide many of our protections (such as policing and regulating); a private sector of responsible businesses, to supply many of our goods and services; and a plural sector of robust communities, wherein we find many of our social affiliations.

Regaining Balance

How do we regain balance in our societies? Some people believe that the answer lies in the private sector—specifically, with greater corporate social responsibility. We certainly need more of this, but anyone who believes that corporate social responsibility will compensate for corporate social irresponsibility is living in a win-win wonderland. Other people expect democratic governments to act vigorously. This they must do, but they will not so long as public states continue to be dominated by private entitlements, domestic and global. This leaves but one sector, the plural, which is not made up of “them” but of you, and me, and we, acting together. We shall have to engage in many more social movements and social initiatives, to challenge destructive practices and replace them with constructive ones. We need to cease being human resources, in the service of imbalance, and instead tap our resourcefulness as human beings, in the service of our progeny and our planet.

About the Author

Henry Mintzberg is a writer and educator, mostly about managing originations, developing managers, and rebalancing societies, which is his current focus. Henry sits in the Cleghorn Chair of Management Studies at the Desautels Faculty of Management, McGill University in Montreal.

He has authored 20 books, including Simply Managing and Bedtime Stories for Managers, which have earned him 20 honorary degrees. Henry co-founded the International Masters Program for Managers as well as a venture CoachingOurselves.com, novel initiatives for managers to learn together from their own experience, the last in their own workplace.

Henry may spend his professional life dealing with organizations, but he spends his private life escaping from them—mostly in a canoe, up mountains, and on a bicycle. You can find out more about his adventures on mintzberg.org, which includes his blog.